Role of or Role of organizational capital at diff ganizational capital at different phases of business’ ent phases of business’s life cycle: a study of PSX companies

Abstract

The goal of this study was to examine the association between Business Life Cycle phases and organizational capital using PSX index companies. Mainly, the study investigates the relationship of organizational capital phases during different phases of the life cycle and its comparison with high and low organizational capital. To fulfill this objective, we have gathered PSX index of 56 companies with yearly observations ranging from 2011-2020. For estimation, a multinomial logistic model was used due to categories of the dependent variable. The results indicate that organizational capital is positively significant at the maturity phase but negatively significant at the introduction, growth, shakeout, and decline phase of the Business Life Cycle. Business Life Cycle and size, ROE, Capex, and leverage significantly but negatively affect the Business Life Cycle, whereas age and ATO significantly affect Business Life Cycle phases. The results vary with different phases of the Business Life Cycle. For future study, the study recommended that the scholar increase the number of observations for more accurate results or alternatively, use a different proxy for measuring organizational capital.

Keywords

• organizational capital
• firms life cycle
• psx companies
• multinomial logistic regression